Author: Rupert Jones

A government scheme to encourage UK lenders to offer 95% mortgages is scheduled to end this month, with no word yet on when its replacement will be launched.The mortgage guarantee scheme went live in April 2021 to help buyers with small deposits get on the property ladder.It allows banks to buy a guarantee from the government on the slice of the mortgage between 80% and 95% of the property’s value. If a borrower gets into financial difficulty and their property is repossessed, the government will cover that portion of the lender’s losses.Not every lender offering 95% mortgages has used the scheme. However, between launch and the end of December 2024, more than 53,000 mortgages were completed using it, of which 86% were first-time-buyer purchases.The government said in February it would be launching “a new, permanent, comprehensive mortgage guarantee scheme” that would “open the door to home ownership for more young families and hard-working renters”. But at the time of writing no detailed information had been announced. The existing scheme is open to new home loans only until 30 June.Ministers had said that by making the mortgage guarantee scheme permanent and comprehensive, “banks and building societies will have long-term confidence to continue offering low-deposit mortgages”.Data issued last week showed the total value of the guarantees provided by the scheme was £1.6bn, while the overall value of the mortgages supported by it was £10.7bn. The mean value of a property bought or remortgaged via the scheme was £211,000.

Saving up for a deposit is one of the biggest challenges facing would-be homeowners, who can find that each month pretty much all most of their money is being swallowed up by rent and living costs.No-deposit deals – known as 100% mortgages – can provide a lifeline, and in recent months a new crop have come on to the market.But in return for not having to put down a deposit, you will have to pay a higher interest rate. Also the affordability rules and lending limits that apply on these loans mean they probably will not be an option for many buyers in pricier areas such as London or for some people considering a larger property.This type of mortgage is controversial, too, because homebuyers who take them out are particularly vulnerable to house price falls, as they have no equity to cushion them if there is a drop in the value of their home. Even a small fall in prices could leave some owing more on their mortgage than their home is worth.We have looked at the details of each of the no-deposit deals. We also explain how, if you can manage to save up a deposit – 5% is good, but 10% is better – this will give you access to more competitive rates and reduce your monthly outgoings.100% dealsStandard home loans where the borrower does not have to put down a deposit used to be fairly common but disappeared after the 2007-08 financial crisis when lenders were concerned about the outlook for property prices.Two years ago, Skipton building society launched a 100% deal, called Track Record, aimed at people who are now renting, or were until very recently.Last month, two more lenders, April Mortgages and Gable Mortgages, launched their own no-deposit deals.It is very difficult to single out one 100% deal as “the best” on the market, says Mark Harris, the chief executive of the mortgage broker SPF Private Clients. “There are positives and potential drawbacks to every product. Every borrower’s situation is different and therefore different outcomes will apply.”At the time of writing, Skipton’s Track Record mortgage was offering the lowest interest rate. It’s only available as a five-year fixed-rate loan, and you can choose from two rates – 5.29%, or 5.39% with £1,000 cashback. There is no fee.Track Record “is ideal for renters with a proven history of paying on time”, says Nicholas Mendes at the broker John Charcol. You need to show proof of having paid rent for at least 12 months in a row on a UK property (with no arrears) in the last 18 months, and have not owned a UK property in the last three years.Since its launch, Skipton has loosened its affordability rules a little so that “in some circumstances” it will offer loans that have monthly repayments of up to 120% of the rent the customer has been paying. The maximum you can borrow is 4.49 times your annual income (for single and joint applicants), rising to 4.75 times if that income is more than £50,000.View image in fullscreenA cap of about 4.5 times income is fairly standard when UK lenders are assessing what people can afford, but it means some house-hunters in higher-priced areas will not be able to borrow enough to buy.The Skipton deal could allow a couple with a joint income of £55,000 to borrow up to £261,250.For those looking to borrow more than 4.5 times income, Gable may be able to help. Its 100% deals are potentially the ones that will allow buyers to borrow the most, says Mendes. The lender will let individual key workers borrow up to five times income. For couples who are both key workers, applicants can borrow up to 5.5 times. Gable’s definition of key workers includes NHS clinicians (nurses, paramedics, doctors, etc), teachers and childcare providers, university lecturers, police officers and armed forces personnel.Gable offers two five-year fixed-rate mortgages aimed at first- and second-time buyers. Its rates are higher than Skipton’s: 6.29% for the standard deal, or 5.99% for those buying a new-build home from one of its partner developers.April Mortgages takes a different tack with its 100% deals: you have to take out a fixed rate lasting for 10 or 15 years. These are not cheap: the 10-year fix is priced at 6.29%, while the 15-year deal is 6.53%. But an unusual feature of this mortgage is that your rate gradually falls as you pay it off. April will automatically reduce the interest rate when the customer drops into a lower “loan-to-value” (LTV) band.The April deals are particularly suited to those who expect to make regular overpayments or plan to reduce their balance quickly, says Mendes. For example, someone expecting a pay rise or inheritance later down the line.April’s maximum loan is 4.49 times income, and it does not lend on flats or new-builds.View image in fullscreenNearly 100% dealsYorkshire building society offers the £5k Deposit mortgage, which, as the name suggests, requires a minimum £5,000 deposit. You can borrow up to 99% of the price of the property.The mortgage is a five-year fixed-rate deal, now set at 5.48%.The 3 & Easy mortgage from Vida Homeloans lets you borrow 97%. You have to fix for five or seven years, and the rates are definitely at the higher end – they start at 7.14% – but these deals are designed for borrowers who may not qualify for a standard home loan.“These 100% or near-100% LTV deals are not about chasing the cheapest rate – they’re more about access,” says Mendes. “They aim to support those who are financially stable month to month but haven’t had the means to save a large deposit, whether that’s due to high rent, childcare costs or lack of family help.”100% with helpFor those with parents or other family members willing and able to provide financial assistance, such as putting up security for the home loan, there are other no-deposit options.Lloyds Bank’s Lend a Hand mortgage and Halifax’s virtually identical Family Boost are available in England and Wales, and allow a first-time buyer to borrow between 95% and 100%. No deposit is required – instead, a family member has to put 10% of the purchase price into a three-year fixed-rate savings account to act as security.View image in fullscreenIn both cases you have to sign up to a three-year fixed-rate mortgage, and at the time of writing, the interest rates were surprisingly competitive: 4.44% and 4.59% respectively. After three years, your family member will get back their savings with interest, as long as your mortgage repayments have all been made.Barclays has the similar Family Springboard mortgage, which is a five-year fixed-rate deal in which those borrowing 100% pay 5.29%. Other lenders offering deals of this type include Vernon building society.95% mortgagesIf you are able to pull together a 5% deposit – perhaps with help – that will give you access to a much bigger choice of deals, and more competitive interest rates.There were 462 deals that let people borrow 95% of a property’s value available last month, according to the financial data provider Moneyfacts. That is more than double the number you could choose from two years ago.Nationwide is worth a look because it will let eligible first-time buyers borrow up to six times their earnings when taking out a five- or 10-year fixed rate for up to 95% of the property’s value. This scheme is called Helping Hand and it means a couple with a joint income of £55,000 and a 5% deposit may be able to borrow up to £330,000 compared with the maximum £247,500 under Nationwide’s standard lending.This week, one of the cheapest standard 95% deals was a 4.75% five-year fix offered by Monmouthshire building society. For those looking for a two-year fix, the cheapest deals included one from the Co-operative Bank priced at 4.83%.For many first-time buyers, a fixed-rate deal is probably the way to go because it offers the certainty of set monthly payments. However, with most experts expecting more interest rate cuts, some borrowers may be considering a base-rate tracker so they can benefit from lower payments in future. With a tracker, the rate moves down, or up, in line with the Bank of England base rate. This week, one of the lowest-cost 95% tracker mortgages was a two-year deal from Newcastle building society where you pay 5.15% (base rate plus 0.9%). However, the deal had a £1,999 product fee.Alternatively, Furness building society had a two-year discounted rate deal at 4.99% (a 3.25% discount off its standard variable rate) with no product fee.90% mortgagesStump up a deposit of 10%-plus and there will be even more deals you can access. Last month, there were 876 mortgages on the market that allowed people to borrow 90% of a home’s value.Halifax has a scheme not dissimilar to Nationwide’s called First Time Buyer Boost that lets people borrow up to 5.5 times income, provided their total income is £50,000-plus and the amount being borrowed does not exceed 90%.This week, the cheapest five-year fixes at 90% included Leek building society’s deal priced at 4.38%, while the best-value two-year fixes included Furness building society’s 4.45% interest rate.

Sports Direct could be breaking the law by misleading shoppers into thinking they are getting a good deal, a consumer body has claimed, after it looked at prices of items ranging from trainers to hoodies.Which? said it had reported the retailer to the Competition and Markets Authority after uncovering what it claimed were “some questionable and dodgy pricing tactics” on its website.The organisation said it had found products being sold on SportsDirect.com with recommended retail prices (RRPs) “that appear to be misleading”, as its researchers could not find the products sold at that RRP price anywhere else online.It meant people may be being misled “into thinking they are getting a better deal than they really are”.A spokesperson said it believed the practices it had uncovered “may be breaking the law”.Which? said that after being alerted to “suspicious” RRPs by some readers, it examined the pricing of 160 products on the website of the firm, which is part of Frasers Group, the retail empire controlled by Mike Ashley.The group has a large portfolio of brands under its umbrella, including Jack Wills, Slazenger, Karrimor, Everlast and Lonsdale.Frasers Group also owns several retailers, including USC, Studio and Get the Label, which sometimes appeared to be the only sellers of these particular brands, said the consumer body.According to the Advertising Standards Authority (ASA), shoppers understand the RRP to be the price an item is generally sold at. This meant shoppers might think the Sports Direct price was “a great deal” compared with the “normal” price across the market, said Which? It added that it found examples of products where the researchers could not find any other online retailer selling them at or above the Sports Direct reference price, “leading researchers to question if these were in fact genuine”.For example, a Jack Wills hoodie was selling for £24 and had a “manufacturer suggested retail price” (MSRP) of £54.99. Which? said MSRP was an obscure term that it believed could be interpreted as being the same as RRP.Jack Wills is part of Frasers Group, and the researchers could not find that particular hoodie sold or supplied by anyone other than Frasers Group retailers, said Which?. It was £40 on Amazon – supplied by Sports Direct – but all the other retailers were selling it for £24.skip past newsletter promotionafter newsletter promotionAnother example involved a pair of Slazenger men’s tennis shoes selling on SportsDirect.com for £32.99 – nearly half the MSRP of £64.99. Slazenger is also owned by the parent group. Which? said it found the trainers for sale on eight other websites, “but the owner or seller was always part of the parent company”. Seven retailers sold them for either £32.99 or £33. Only one retailer, Slazenger itself, sold them at the MSRP.ASA rules state that “if a marketer is the only seller of a product, and so has set the price themselves, it is unlikely to be acceptable to refer to the price as an RRP”.However, Which? said it was unclear whether that applied where the only sellers were members of the same group.Sports Direct was approached by the Guardian for comment. Which? said the company did not provide it with a comment for publication.